Jun 28, 2012

By BRYAN RAHIJA

Looking for billions of dollars' worth of savings for taxpayers? Look no further than government service contracting. Last September, POGO released a report that found service contractors cost taxpayers nearly twice as much as federal employees who do the same work. With the final discussion of the mammoth defense budget bill looming in Congress and with the nation's deficit crisis largely unresolved, we figured there’s no better time than now to take another look at data from the report.

Our report examined 35 different occupations. This series offers a fresh look at ten of those occupations. Today’s occupation is security guard. Let's check out the numbers!

By now, most Americans have probably heard about the private security contractors that continue to play a significant role in U.S. activities in Iraq and Afghanistan. This post isn’t about the costs of those security guards—which can present an array of challenges to government officials beyond cost—but rather domestic security guards. Our report offers some examples of how government agencies are increasingly turning to contractors to provide these personnel:

For instance, the Department of Justice relies on contractors to provide correctional officers. Similarly, the Department of Homeland Security’s Federal Protective Service (FPS), which is responsible for providing security for government buildings, outsources over 90 percent of its security guard services.

POGO found that the annual contractor billing rate for security guard services is $68,515. The average full compensation for a federal employee performing those same services, according to our report, is $50,257—and that includes benefits. To put it another way, security guard services performed by a federal employee come at around a 25 percent discount from those services performed by a contract employee.

Don’t forget—security is just one of the many services that the government now outsources to contractors. The scope of this outsourcing is vast: In fiscal year 2011, the federal government spent $325.3 billion on service contracts, according to USASpending.gov. That’s a lot of potential for savings.

As we’ve said before, the key takeaway here is that the government needs to start conducting meaningful comparisons of the relative costs of contractors and federal employees instead of accepting hook, line, and sinker the conventional wisdom that contractors are cheaper.

Comments

How does the cost of contractor security guards and the cost of government security guards compare to the DOL wage standards for that category? It might illuminate how much of the difference in cost is due to paying contractor overhead, G&A, and profit in addition to the internal government costs of issuing and managing the contract.